Answered step by step
Verified Expert Solution
Question
1 Approved Answer
answer all parts plz Intro Deluxe Furniture is thinking of buying a wood cutting machine for $190,000 that would save it $40,000 per year in
answer all parts plz
Intro Deluxe Furniture is thinking of buying a wood cutting machine for $190,000 that would save it $40,000 per year in production costs. The savings would be constant over the project's 3-year life. The machine is to be linearly depreciated to zero and will have no resale value after 3 years The machine would require an additional $3,000 in net working capital. The appropriate cost of capital for this project is 10% and the company's tax rate is 35% Year 0 Year 1 Year 2 Year 3 0 40,000 0 63,333 0-23,333 40,000 40,000 63,333 63,333 23,333 -23,333 Cost savings Depreciation EBIT Taxes (35%) Net income Depreciation OCF NCS ANWC CFA Part 1 IB- Attempt 1/10 for 10 pts What is the cash flow from assets in year 0? Choose the right sign. 0+ decimals Submit B Attempt 1/10 for 10 pts Part 2 What is the cash flow from assets in year 1? 0+ decimals Submit DB Attempt 1/10 for 10 pts Part 3 What is the cash flow from assets in year 2? 0+ decimals Submit IB Attempt 1/10 for 10 pts Part 4 What is the cash flow from assets in year 3? Hint: add the recovery of net working capital 0+ decimals Submit JB Attempt 1/10 for 10 pts Part 5 What is the NPV of this project? 0+ decimals Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started